By Peter Crichton
THERE are indications this week that most of the Malton producers faced with the choice to drop to a fixed 70p contract or keep to 85.5p for a further three months have gone for the first option rather than risk losing their contract in early December.
Spot prices remain dull, with most bacon pigs traded between 45-50p/kg deadweight with plenty of numbers still in the system.
The latest AAPP for the week ending 12 September has hit new record lows to stand at just 60.5p/kg dropping another 2.8p on the week but still 10-15p higher than equivalent spot quotes.
Some abattoirs have reported that they are aware they will be facing a sharp drop in throughput when the effect of the surge in sow slaughterings filters through. This is expected to have a major impact on the availability of slaughter pigs from February next year when most of the progeny from the herds now being culled will have been slaughtered.
The August kill averaged 307,500 per week and industry calculation feel that this could drop by 30% to around 215,000 in a years time. This will put many abattoirs seriously under capacity and meat traders believe will lead to further abattoir closures.
This view is supported by the pattern of sow slaughterings. Before the current crisis most culled sows were replaced with breeding gilts. However, with breeding companies reporting a collapse in gilt sales most of the weekly kill, which now exceeds 8000 head, is of breeding sows leaving the UK herd for good.
Statisticians have calculated that even allowing for farm saved gilts, if 50% of the total represents non replaced sows this will lead to an equivalent reduction in the weekly pig kill of 70,000 to 80,000 head.
However, economists have pointed out that unless the drop in home production is coupled with a fall in the value of the Pound and better demand for the UK produce there is still no guarantee that our prices will rise above much cheaper foreign levels.
- Peter Crichton is a Suffolk-based pig farmer offering independent valuation and consultancy services to the UK pig industry